The European Union appears set to keep its hard-line stance
against Microsoft’s allegedly anticompetitive tactics, and it is insisting on
imposing a €899 million ($1.36 billion USD) fine on the company to keep its
future actions in line.

Microsoft’s lawyers disagree, however, and entered a variety of arguments
last May that the fine is too high, and was entered based upon “manifest
errors” in the EU’s process. With copies of the arguments released
publicly earlier this week (PDF), its demands to annul the fine are now
available for perusal worldwide:

The EU “erred” in its
decision to subject Microsoft to regular,
periodic fines while the company released copies of its
interoperability specifications, due to the fact that Microsoft’s pricing
for the documentations was not in line with the EU’s definition of
“reasonable,” – the EU never explicitly stated what it considered a
“reasonable” price to be.

Further, licensing rates for
information on its proprietary protocols – despite not passing the EU’s
benchmark of reasonability – were more than 30 percent lower what industry
experts PriceWaterhouseCoopers determined to be a fair price for
“comparable technology.” (Ars Technica questioned
this finding early last year, noting that in many cases ‘comparable
technology’ was open source, and therefore free.)

Microsoft should not have
been subjected to a “heightened patentability test,” where the innovation
of its trade secrets was placed under scrutiny in order for the EU to
decide whether or not Microsoft should have charged royalties for the use
of its trade secrets.

The EU based some its
assessment reports on documents obtained that courts later determined to
be “unlawful.”

Microsoft was denied its
“right” to be heard due to the EU’s failing to give Microsoft the
opportunity to speak up after the period for which it was fined,
preventing the company from “commenting on all relevant aspects of the
case.”

And, simply, the fines
imposed are “excessive and disproportionate,” particularly due to the fact
that the EU chose to challenge its licensing practices.

Additionally, Microsoft previously
appealed the fine to Europe’s Court of First Instance last May – however
little has developed in the appeal since its filing.

The company’s trouble began in 2004 when the EU demanded Microsoft provide
competitors the ability to connect to software running under its Windows
platform (applications like Exchange and Active Directory). Third-party attempts
to connect to Microsoft technologies have, typically, been written by reverse
engineering the company’s communications protocols.